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per share on the date of grant. The fair value of the options at the
grant date is $150,800. The period of benefit is 2 years.
Prepare Barwood’s journal entries for January 1, 2014, and
December 31, 2014 and 2015. (Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no entry
is required, select "No Entry" for the account titles and enter 0 for the
amounts.)
3) Tomba Corporation had 546,600 shares of common stock
outstanding on January 1, 2014. On May 1, Tomba issued 51,000
shares.
4) For each of the unrelated transactions described below, present
the entries required to record each transaction.
(Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts.)
5) Illiad Inc. has decided to raise additional capital by issuing
$176,300 face value of bonds with a coupon rate of 11%. In
discussions with investment bankers, it was determined that to help
the sale of the bonds, detachable stock warrants should be issued at
the rate of one warrant for each $100 bond sold. The value of the
bonds without the warrants is considered to be $139,570, and the
value of the warrants in the market is $24,630. The bonds sold in the
market at issuance for $156,000.
(a) What entry should be made at the time of the issuance of the bonds
and warrants? (Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit Credit
(b) Prepare the entry if the warrants were nondetachable. (Credit
account titles are automatically indented when amount is entered. Do